BackGM to axe 10,000 jobs; slash salaries
GM to axe 10,000 jobs; slash salaries
PremiumNew York: US auto giant General Motors on Tuesday said it will slash about 10,000 jobs this year besides resorting to significant pay cuts as the ailing carmaker explores ways to cope with plunging sales.
In a statement, GM said it would reduce “salaried employment globally from a current level of 73,000 to approximately 63,000. These reductions are expected to take place in 2009".
The automaker said that it would also resort to temporary pay cuts for majority of American employees, starting 1 May.
According to the statement, these difficult actions have been initiated in the wake of a steep fall in worldwide vehicle sales and restructuring measures for long term viability.
Nearly 3,400 employees of the company’s total US workforce of 29,500 would be impacted. A major chunk of the layoffs are anticipated to happen by 1 May.
In 2008, GM received a lifeline worth billions of dollars from the Federal government to stave off possible bankruptcy.
Reduction in the number of salaried employees would vary by global region, depending on the staffing levels in the region and market conditions, it added.
GM said that a “temporary pay reduction" would begin from 1 May and would be effective till the end of the year, when the same would be reviewed.
Noting that the salary cut would be for majority of the US salaried employees, the carmaker said, “in the US, executive employees will have their base pay reduced by 10%, and many other salaried employees will see reductions of 3 to 7%".
The statement pointed out that other countries “are currently reviewing compensation and benefits for salaried employees".
The automaker added that it had outlined the need for the reductions in the restructuring plan submitted to Congress in December 2008.
In a reflection of its deteriorating market situation, GM lost its position as the world’s biggest carmaker to Japan’s Toyota Motor in 2008.
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